The latest episode of the The Talk Show, Gruber discusses his distaste for apps that ask for a rating. I found the view a bit disappointing. He has a lot of influence and is both a user and an app developer.

I can’t understand this adversity. A developer works hard and wants to know what a user thinks of their work. Is our time too much in demand to leave a bit of feedback? Ratings are supposed to have an effect how apps appear in the store, their rank and eventually their placement. An app without ratings is an app that may never be found, a possible lost soul.

I have responded in every way to the rating dialogs. If I don’t have time or have not had enough time with the app I will request to be asked later. If I just don’t want to rate it, I will respond with a “No thanks” but I do rate the apps I use and like.

This is but one problem with the App Store and users. Giving an application a rating or a review is not easy. A user has to go to iTunes and the App Store, find the app and rate it. It’s too much work.

David Smith has a thoughtful piece on his hopes for the future of the app store. I wish I had the same positive view of the future:

I want to believe that the App Store is a special place. I want for it to be the singularly best venue for customers to come and find innovative, well designed, quality software. Software that pushes the boundaries of what is possible and continually amazes and delights its customers. I want for there to be an aspirational pull upwards on my own development. I want to feel like I need to work extra hard to make sure my apps meet the high standards my customers have been trained to expect.

It’s not just the App Store that we want to feel like a special place — it’s iOS itself. Using iOS, on both the iPhone and iPad, dozens of times every day, for stretches long and short, should feel like a platform in pursuit of perfection. Having a de facto standard practice where apps badger you at seemingly random moments with pop-up ads prompting you to rate them is in contradiction to this ideal.

I could be missing something but shouldn’t a user rating an application be helping filter out the bad apps? If a developer can’t ask for a rating, and we know users hardly go out of their way to rate an app, how can ensure we are getting the good apps? Maybe we should remove ratings altogether? Or it could be a time for a change to the way apps are rated; instead of a 1 to 5, a “Like” system such as on Facebook. You can’t dislike something on Facebook, only like it. A viable option?

I don’t think chastising a developer because they are trying to ask the user what they think is fair. Accept this or don’t, kill off ratings completely or change the procedure. I think what is there not doesn’t work and is too hard for users to take part.

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Jeremy over at Tapity had a great post yesterday talking about the very same topic I blogged about; paid apps. Tapity makes much of its living on paid applications like Languages, Grades and Hours and they face the reality.

By piecing together a few anecdotes I have heard, the top ten best-selling apps are selling roughly 25% as many copies as they did a year ago. If a #5 app sold 16,000 copies a day a year ago, #5 might only sell 4000 copies a day today. Now, that may still sound like a lot but apps are lucky to be #5 for a few days before dropping back into the abyss of obscurity. I’m not saying those statistics are by any means exact or even accurate but this is the kind of scale we are talking about. It is pretty drastic.

The volume just isn’t there anymore for paid apps. Premium apps that can sell for $5-$20 can probably continue to do well but the days of hit-based $0.99 apps are very much over.

His possible solution:

My thinking has changed quite a bit over the past few months and here is what I have come up with: we need to stop making apps and start making businesses.

Turning an app into a business? He explains it exactly as I have been telling those that will listen:

Hours is a perfect example. The old thinking goes like this: sell Hours for a few bucks, try to have a big launch. Rinse and repeat for updates. Since we’ve learned some things about launching great apps, we can probably do fairly well with this model and make, say, $100k.

That would be considered a successful app. But $100k isn’t enough to support a business like Tapity. It’s not nearly enough.

But what if we think bigger? Yes, release the app and sell a lot of copies but don’t stop there. Use that to prove to big companies that Hours is the absolute best time-tracker out there, hook into the back-ends that those companies use, and sell it to them at the corporate level for big bucks. Build some web and Mac integration. Maybe even hire a small salesforce. Make it a company.

Yes, yes and yes again…thinking out of the app box that has become warm and comfortable to making our apps into a real business with the actual app just being an integral part of it.

Jeremy, how about a nice SaaS app to collect all those entries from Hours for companies to use? You can charge monthly, nice recurring revenue instead of that terrible one-time app charge. And just think, you’re adding a ton of value.

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It’s really hard to make a living in the Apple App Store. It’s not impossible but neither is winning the lottery. People who aren’t developers don’t understand how hard software is to create and because of the Apple-influenced ecosystem, they expect software will be cheap or free.

I have been thinking about how to be profitable in the App Store or better to avoid it altogether. I’ve discussed this with developer friends and it seems to be a challenge we all face today. Times are changing and in order to thrive we need to adapt.

Oh the Choices We Have

Today we have mainly 3 ways to make money in the app store:

Conventional purchase, typically starting at $0.99 and ranging up to $4.99. Users seem to hate to spend even $0.99 when there is an acceptable, free, alternative.

Advertising – display ads in your software and get paid when a user clicks on the ad. If your sales are small, there aren’t many people to look at these ads and less to click.

In-App Purchase (IAP) – this seems to be a valid alternative to asking users for upgrades. IAP allows developers to bundle features and offer users these features for a fee.

IAP is an approach I am considering for my current apps and future ones. The idea would be to give the basic software away and charge for “Pro” features. These pro features need to be real value to the user, no just take a crippled lite version of the app and enabling features users expect.

I have experimented pricing for my apps. My main app is Palette Pro, started out for $1.99 and did fine at release. I later changed the price to free for a short period of time to test the results, which were astonishing. Downloads for the free app was 1000x that of paid. This is pretty powerful and says a lot. Just like most developers, I can’t work for free.

The only business models I want to work on any more have some mass-market component that is absolutely free, and a niche companion product that makes money off of the exhaust fumes of the mass-market component.

The last two businesses I started are Stack Overflow, which is free, where the careers business on the side makes money on the small fraction of Stack Overflow users who are looking to get better jobs, and Trello, which is free, but the business of providing administrative tools to large organizations using Trello can sustain the whole business.

This is more than just “freemium” or “advertising-supported.” Freemium and Ad-supported business models are special cases of this general model. The real insight is that the free product has a chance to reach an enormous audience which provides distribution/advertising/marketing making it trivial to go to market with your paid product.

What Marco is reporting here is that the old-fashioned “make something and get people to pay for it” business is much harder to pull off and likely to always be left in the dust by someone making the same thing for free, getting 100x the user base, and getting 1% of them to pay for some value added feature.

Upgrades

Apple has so far refused to listen to the developer community for app upgrades. Today, when a developer releases a new version of their app they are not compensated. Small updates are fine and expected, but full an upgrade that takes developers weeks or months are hard to justify spending the precious development time and see no immediate return. If a user purchases an app, they receive free-for-life upgrades.

The only way today to get paid for upgrades is to create an entirely new app in the app store. People have to pay the full-price for the mew features. This is great for developers but not appreciated by users. Realmac Software, developers of the Clear to-do app for iOS and the Mac, attempted this recently and it was not well-accepted. So, Realmac back peddled on their decision.

David Smith has a great episode of Developing Perspective where he talks with a Clear user (his wife) about her thoughts on the Clear upgrade attempt. If her thoughts represent how most users view software on their mobile device; upgrades are not worth pursuing.

Personally, I think this is a great way to get paid for upgrades. Users don’t have to buy, if their current version does what they need then just keep using what you have. This is how software has been sold over the years; you have version, here’s an upgrade, don’t buy it if you don’t want it. Users don’t favor this approach.

I’ve gone back and forth on what Overcast’s business model should be. I’m definitely charging customers directly (rather than venture-capital or ads), but I’m still debating where, how, and for what.

I’m sure of one thing, though: the market for paid-up-front apps appealing to mass consumers is gone. If you have paid apps in the store, you’ve probably seen the writing on the wall for a while.

That model made sense when there were fewer apps available, but now that there are plenty of free and good-enough versions of almost anything, it’s a different game. Apps targeting niche markets can still find enough paying customers to stay alive if they’re much better than any free alternatives, but the number of apps in that situation is always shrinking.

I don’t think we will see an upgrading pricing structure any time soon from Apple. The company wants apps to be free and let developers figure out how to run the business side of things.

The Gold at the End of the App Rainbow

The art of pricing combined with making a living with mobile apps has been on my mind for a long time. Recently my thoughts have become a bit more tangible. The reality is, most apps will be free. Most people with make money giving their applications away, while getting the most attention, then offer premium services with In-App Purchase.

One aspect I haven’t mentioned but believe is probably the best way to realize the value of mobile applications is to offer applications for free but consume a paid backend. A Software-as-a-Service (SaaS) backend is offered for some monthly fee and the mobile application is simply a client of the SaaS app, just like a web browser. The beauty and simplicity of this approach is that it works for apps in the Apple app store but also on Google Play and the Windows Store.

It’s interesting where this is going but things are pretty clear; developers need to change their approach to how they earn their living in mobile.

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I’m happy to introduce my latest application for iOS devices, Note-It, is now available in the Apple App Store. This is a productivity utility I wrote for myself with the hopes others might find it useful as well.

The idea for Note-It was born as a solution to the way I research on the web on my iPad. I read articles in Google Reader, visit links from tweets on Twitter and copy URLs from the sites I visit in Safari. I often take these links and paste them in an email which I send to myself to be viewed later.

Note-It helps me be a bit more productive by cutting out some steps.

I can only send to one email address maintained in the Settings part of the app. When Note-It sends an email, it only uses this address. No more typing my email address.

My main use case is finding a URL or some block of text I want to save for later, copying and pasting in an email.

Note-It monitors the clipboard and when active, will ask if I want to use what’s in the clipboard and paste it into the current note.

There is only one note active at a time, put as much as you want to save and send it off.

A complete archive of sent notes is available in case you forgot what you sent previously.

The user interface is simple by design to compliment how simple the application actually is.

The New York Times had a great article this past weekend titled As Boom Lures App Creators, Tough Part Is Making a Living. As the title indicates, the life of a mobile developer is not often the glamor we hear about. The million-dollar jackpots are few and far between and are more difficult now than in the early days of the Apple App Store.

The article chronicles the two very different levels of success; one, Ethan Nicholas who created the iShoot game and made over $1 million in 2009. The other part of the story is a couple who worked full-time on a handful of applications focused on children.

It saddens me when I see smart people treating the app store akin to The California Gold Rush; same state and the same dreams of getting rich and too often a very similar outcome:

The Grimeses’ quest cost them more than $200,000 in lost income and savings. So far this year, their eight apps have earned $4,964. When the newest iPhone came out at the end of September, the couple immediately bought two.

I can attest to the same experience as the couple who lost it all. I didn’t let it go that far but having an idea, creating an application over a couple months and receiving very little return for my efforts…followed a similar path. In hindsight, I shouldn’t have been surprised.

The app store is stocked with so many applications it’s almost impossible to stand out in the crowd. Unless you are well-funded and can afford a lengthy and costly marketing campaign you will likely be cast to the abyss that is the app store. Those lucky few will be selected by Apple to be promoted on the store, to be glorified in iTunes and will go on to nice rewards.

This is not the path a smart business person should travel. Developers are smart, we work hard and just want to be rewarded for our efforts. It is because we are smart that we should step back and think about the path of one-time customers greedily parting withe their $2.99, $1.99 or, I shudder to say, their $0.99. We can’t support our families with these measly morsels.

Creating applications for iOS and Android are fun and very rewarding but these platforms should not be the island for your application. The people building businesses in this space today should be cleverly thinking of ways to monetize their idea without the goal of hitting gold but rather building on a customer base willing to keep giving you money. How many applications can someone create, sell for $0.99 and get a lifetime return of $5,000…if you’re lucky? This is not even breaking even, it’s a really weak business model.

The better approach is solving real problems for someone who is willing to give you money to ease their pain and continue this on a regular basis.

Refer back to Ethan Nicholas and the direction he has taken since his million-dollar application idea:

Mr. Nicholas and a friend, Brent Miller, were inspired to form a company. “We were going to make another million or two,” said Mr. Miller, 38. But when none of their new games sold like iShoot, the pair moved in an entirely new direction. They founded echoBase, a start-up with 14 employees that is developing apps to allow doctors and nurses to view and update medical records across different computer systems. They brought in Mr. Miller’s father, Rod, a former I.B.M. sales manager, as chief executive.

This is an example of a solution to a real problem, making the life of doctors better and at the same time providing accurate and reliable care to the patient. The application is free on the App Store but it’s very clear in the description that a server piece is also needed. I am sure THIS part is not free. This is someone who has made it in the App Store but realizes it’s not easily reproducible. This should be the type of applications we are creating, ones that create a revenue stream for developers but also add real value to users.

An organization like echoBase has iOS client software and some generic server piece which opens the doors to using other clients as well. Anything from Android and Windows RT to web and rich Windows Desktop apps.

The Apple App Store is very different today than it was in 2009 but it still holds great value to the people who are smart and don’t try to play the app lottery.

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Since the launch of our first company-owned iOS application, PalettePro, at the end of May, it has been a bit of a learning experience about marketing my first application and every bit of publicity helps and is appreciated.

The concept of this tool is simple—the best ones usually are. Sometimes people spot a color that they would have for a project or practical purposes. What you can do with PalettePro is take a picture with your gadget from within the application, select the color from the image and allow the app to isolate the exact hue you wanted. It couldn’t be any simpler or more straight-forward; this is a tool that even the most technologically-impaired person could get the hang of it after a few tries.

The idea of PalettePro is simplicity and it pleases me it’s one thing that stood out.

I recently finished up and submitted my first personal iOS application to Apple for sale in the App Store and have it approved. It is the first application developed for Still River Software and not specifically for one of our clients.

Background

The idea for PalettePro came about when I was out at dinner one evening with a friend of mine and we got to discussing a client project and app ideas. This idea came to the top of the list and as a way to help us match colors for client web sites to their logo, office colors or whatever colors were important to them.

I decided I would work on the application as time permitted and come up with something I wanted to use and if others could find value, then great.

The purpose of the tool is simple; use the camera on the iPhone or iPad to look at an object and sample the color in order to be used in web applications.

Design

I have to first say that I am not a designer but I appreciate simple tools that do a single job and do it well. This was my goal for the first iteration of this application; keep it simple.

The user experience is to be straightforward, just point the device at an object, tap the screen or button and see color values. I also wanted to be able to save the results for later viewing.

You should notice when looking at the application that it’s simple and does one thing well.

Usage

Using PalettePro is easy and just like taking a picture. When the application loads you are immediately presented with a screen similar to above, obviously with your view in the camera. As you pan around your target the color values automatically change until the desired color is sampled. Hit the Scan button or tapping the screen freezes the color scanning and you can with save or scan again. Simple and straightforward.

Later copy the hex values into your web application or take the device to your local paint store to match.

Apple announced yesterday they launched subscriptions in the App Store. It’s not entirely a surprise to most developers ever since the release of The Daily by News Corp which offers in-app purchasing.

Interpretation

This announcement from Apple seems to have caused quite a stir on the interwebs. The press release from Apple is pretty clear from a high level:

“Our philosophy is simple—when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing,” said Steve Jobs, Apple’s CEO.

Steve goes on to say:

“All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app. We believe that this innovative subscription service will provide publishers with a brand new opportunity to expand digital access to their content onto the iPad, iPod touch and iPhone, delighting both new and existing subscribers.”

This is the part that seems to confuse people a bit. It says, if you offer subscriptions out side of the app store that you need to also need to provide an offer in the app store as good as the one outside. When a user decides to buy from within the application, Apple keeps 30%.

It’s About the Customer

In my opinion, the bottom line is about customers and the user experience for them. I have to admit that I would rather pay for a subscription from within the application as opposed to going outside to a web site and enter my payment details there. If I use iTunes, Apple has all my information and like buying an app, it is very easy.

The Bright Side

This gives developers a call to action in a sense, for one, make your subscription service super-easy so people don’t mind coming to your site to manage subscriptions.

One thing to keep in mind, users may be more willing to subscribe *if* they can do it on the app store, therefore giving the developer/publisher sales they may not have gotten otherwise.

Just as the Mac App Store opens more opportunities, this seems too as well.

Is there a Dark Side?

Maybe. There are still questions that are not clearly answered. What about applications which offer subscriptions today, like Netflix? Will NetFlix need to start paying Apple 30%? It seems that way if NetFlix allows a user to pay in-app, but that’s not how I pay them. I have a subscription I maintain on their web site.

I think this holds true with Kindle book purchases too where I buy on the Amazon website and the books comes to the Kindle app on my iPad.

Conclusion

It seems when Apple comes out with something new or makes a change to rules, people initially think they are onerous and contain ulterior motives. If one reads what Steve Jobs has said, this is yet another way for a publisher to get paid for content.

If I am missing something obvious, I would love to hear about it. As an iOS developer I really want to understand as much as I can.

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It’s a great time to be a developer today and the innovation Apple is putting forth with iOS gives developers a great platform for which to create applications.

I have been quietly putting small applications together for iOS but have had reservations about the end result. How does a developer succeed in the App Store? There are a lot of applications in the store and more popping up every day. Once an application appears in the store, how do people find out about it?

App Store Search Opportunity

The App Store search is abysmal at best. I have tried to find applications that I know exist and can’t seem to locate them, except by name. It’s pretty clear there is a problem when sites such as uquery pop-up which try to solve the problem. From their own About page:

uquery.com is a new search engine focused on the emerging market of iPhone & iPod Touch applications. We have listened to many requests of the community and the frustration of being able to search and find applications on the iTunes AppStore. With 263,999 applications available on the AppStore, it has become tremendously difficult to find the right application.

My tests on uquery.com returned some really good results. It seems the key to any of the searches on the site is how good the metadata is provided by the app publisher.

Apple is trying to make it easier for developers to enter the iOS ecosystem by lifting prior restrictions put on developers using tools beyond Objective-C and C++:

We are continually trying to make the App Store even better. We have listened to our developers and taken much of their feedback to heart. Based on their input, today we are making some important changes to our iOS Developer Program license in sections 3.3.1, 3.3.2 and 3.3.9 to relax some restrictions we put in place earlier this year.

In particular, we are relaxing all restrictions on the development tools used to create iOS apps, as long as the resulting apps do not download any code. This should give developers the flexibility they want, while preserving the security we need.

Now that developers can use tools like Monotouch to write in C# and deploy on iOS, this leads to that many more apps in the App Store, great for Apple but not so great for users. At last count the App Store had close to 300,000 applications, but I am only aware of a small fraction. If in a year the number of applications doubles, how is being able to find software going to be any easier if Apple does not improve its search? I think the answer is, it won’t.

Enter the Mac App Store

This will add another large number of applications for users not be able to find. So Apple, could you please fix your app store search.

Maybe the answer is to rely on third-party sites like uquery.com or apps like Google Mobile but I don’t think so. I think Apple needs to lead publishers better so they can position apps to be found by search, the right metadata.

As a developer and someone who writes applications for iOS and would take part in the Mac app store, I am concerned about getting lost in the abyss, to not be found by a potential customer. It is my responsibility to give enough information about my products to customers but if Apple fails to guide users to the products…we both lose.